INDIA: SIMA Want Early Clearance To Bt Cotton

The cotton textile industry wants the Government to end the controversy on genetically modified (GM) cotton and take steps for early clearance to commercial cultivation of the Bt cotton in the interest of the domestic industry.

According to Mr V S Velayutham, Chairman of the Southern India Mills Association (SIMA), The fluctuating trend of the local cotton crop size and its high degree of susceptibility to pests attacks apart, the rise in India's cotton imports in recent times are sure pointers that a decision on this issue can no longer be postponed as major cotton producing nations have already moved towards GM cotton cultivation.

Mr Velayutham feels the Indian cotton yarn suppliers would increasingly come under pressure from the foreign buyers on quality aspects of cotton used. The importers insist on contamination-free cotton to be used for their yarn supplies and, to stress the point, they even specify on the cotton of country-origin that should go into production, he says.

As for the current cotton season, the SIMA chief holds the view that with the prices of indigenous cotton and that of imported one being on par, the cotton import may slow down this year and only the exporting units may go for imports. This factor may also favour the indigenous cotton consumption going up this year. In any case, the industry has asked the Government not to increase the customs duty on cotton.

"So long as the prices of local cotton do not fall below the minimum support price fixed, there is no justification for raising the import duty on cotton," according to Mr Velayutham.

The biggest worry now for the Indian textile industry, however, is the cost competitiveness as the interest rate charged to the industry by the lending institutions is high. World over the textile industry is undergoing restructuring with the active collaboration with the respective Governments in individual nations. China has been offering credit to its textile industry at 6 per cent to make them export competitive. In India, the packing credit at 9-10 per cent range is high. Even the concessional lending rate for term loans offered under TUFS works out 8 per cent.

Added to this, the cost of power is higher. These factors would make India's textile manufacture costlier, according to the SIMA chief.

January 8, 2002

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Added: January 8, 2002
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